Bij OCADO vindt nu een zeer wel mogelijk JET scenario plaats op basis van de prestaties.
Drama bedrijf qua beurskoers, maar nu de koers dramatisch gedaald is is er ineens belangstelling volgens enkele partijen.
Ik kan me voorstellen dat we op termijn ook een dergelijk signaal voor JET oppikken.
A Bid for Ocado Would Be Its Greatest Delivery
With the online grocer's share price in the doldrums, a bidder could finally emerge.
ByAndrea Felsted
23 juni 2023 om 06:00 CEST
Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times. @AndreaFelsted
Investing in Ocado Group Plc has always been about jam tomorrow. Yet if a bidder emerges for Britain’s online supermarket turned technology company, shareholders would have the opportunity to realize some value today. They should seize it.
Shares in Ocado rose as much as 47% on Thursday, after the Times reported the company had attracted interest from more than one US suitor, including Amazon.com Inc., which declined to comment.
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When Ocado went public almost exactly 13 years ago, it was touted as challenger to sleepy brick-and mortar-supermarkets. The theory went that as consumers shopped with Ocado, and their orders were fulfilled by its state-of-the art warehouses, efficiencies would kick in and the e-commerce business would generate an operating margin similar to Tesco Plc’s then sector-leading 6%, delivering pre-tax profits and bolstering the share price.
In reality, this has never happened. Ocado has made annual pre-tax profit just a handful of times since it listed. It has been dogged by challenges from too little room in its distribution centers to a fire at one of its robotic warehouses.
Waiting for Ocado
The online supermarket turned technology company has been loss making for many years
Source: Bloomberg Intelligence
Perhaps the biggest disappointment was its performance during the pandemic, when Ocado Retail, a joint venture with Marks & Spencer Group Plc since 2019, did not have enough warehouse capacity to satisfy customers. Traditional supermarkets were able to scale up their online operations much more quickly by using their stores to fulfill orders. Ocado Retail has since opened new facilities, but now a downturn in demand means it suddenly has too much capacity.
Since the M&S deal, Ocado has been focused on its technology arm, which operates the online services of food retailers, including Kroger Co. in the US. But investors may be forgiven for thinking that here, too, they will have to wait for returns on the significant investments that Ocado is making in building warehouses for its partners.
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Some 23 sites are now up and running — and generating fees for the company. Around 40 are due to come online over the medium-term. As the sites become operational, the fees paid to Ocado, and consequently its cashflow and earnings, should ramp up. But that’s some ways off. In the meantime, Ocado must invest in the infrastructure. Analysts at Bernstein expect annual capital expenditure of £500 million ($636.7 million) to £650 million in each of the next five years.
The company raised £875 million last year, on top of £1 billion in 2020. It has said it sees no need for additional financing. But some shareholders remain concerned that it will need extra funds to meet its investment commitments.
Kroger, its flagship partner, has also slowed the pace of opening of the new robotic warehouses planned under the contract, as it’s in the process of acquiring rival Albertsons Cos. Whether it accelerates the pace of development will be the key determinant of the fortunes of Ocado’s technology business.
If a bid for Ocado materializes, shareholders won’t have to wait around to find out.
Missed Delivery
Shares in Ocado have slumped as interest in online shopping has waned
Source: Bloomberg
The key question is what is the right price for Ocado’s cutting-edge technology and the future potential in the partnerships it has struck. With the share price increasing to as much as 631 pence on Thursday, from Tuesday’s close of 424 pence, the market appeared to be betting on an offer with a premium of upwards of 50%.
But given that the shares reached a high of almost £29 in September 2020, would investors be prepared to accept a much lower level?
Interest at 800 pence was mooted by The Times. That is closer to the year’s high of about 945 pence and may be more appealing to shareholders. But it would be a near 90% premium, perhaps less palatable to a bidder.
Just as Ocaco’s returns have always contained a hope factor, so has its potential to be acquired. The company has been mooted as a target several times before over the years.
It is notable that despite the sharp increase in the share price on Thursday, no statement clarifying the situation was made. Ocado also has significant short interest — accounting for about 11% of the shares — according to IHS Market. This can exacerbate price movements as hedge funds have to acquire more shares to cover their short positions when stocks rise.
Tech Trouble
Short sellers have been increasing their bets against Ocado
Source: IHS Markit
Tim Steiner, co-founder and chief executive officer of Ocado, should have put the company up for sale when the world believed the pandemic-era shift to online grocery shopping would be permanent.
Instead, he clung on, convinced of the potential of Ocado’s tech to transform the global food-retail sector. If a bid does come to fruition, shareholders will be able to decide whether they’ll do the same.